Farming debt in South Africa increased 30% between 2014 and 2017, according to recent statistics released by the Department of Agriculture, Forestry and Fisheries (DAFF).
According to Senwes manager of agricultural economic services, Johan du Toit, indications were that it could reach the R160 billion mark during 2018, which would result in a debt overhang of 35%.
“This increase should be seen against the backdrop of, among other things, land prices moving sideways, [or even declining in some instances], stricter monetary policies and political uncertainties.” According to Agbiz, the key lenders to the South African agriculture sector were the Land Bank, commercial banks, agricultural businesses, and other relatively small financial institutions such as merchant banks, insurance companies and input suppliers. Commercial banks held 62% of the debt, followed by the…